I have not written about platinum in months because the price has gone nowhere fast. The price has been trading around the $1,000 pivot point and was below in late 2024. In a mid-August 2024 Barchart article on platinum, I concluded:
Platinum has disappointed investors and traders for years, and the price remains in a range around the $1,000 per ounce level. When the price finally breaks out of its rangebound consolidation, we could see a significant rally. Low liquidity and gold’s price action continue to favor higher platinum prices. Market participants need patience and perseverance to participate in the platinum market. Buying on price weakness is the only logical path for the rangebound platinum market.
Nearby NYMEX platinum futures were at the $951.50 per ounce level on August 12. The price was slightly lower in late December, at around $945 per ounce.
Range trading in platinum continues
Nearby NYMEX platinum futures have traded in a roughly $400 per ounce range since June 2021.
The monthly continuous futures chart highlights platinum’s March 2022 $1,197 per ounce high and the $796.80 September 2022 low. Platinum futures have been straddling the $1,000 level over the past years.
U.S. energy policy will shift- Does that support platinum demand?
On January 20, 2025, U.S. energy policy will make a dramatic about-face. After four years of addressing climate change by supporting alternative and renewable energy, the U.S. will return to a “drill-baby-drill” and “frack-baby-frack” approach to oil and gas. The incoming Trump administration has pledged to achieve energy independence from OPEC+, reduce inflation, and increase revenues from exports.
Gasoline-powered automobiles require platinum group metals for their catalytic converters. Additionally, crude oil refining that produces gasoline and distillate products requires platinum group metals as refining catalysts. Platinum and platinum group metals are dense with high melting points, making them critical catalyst ingredients. The shift in U.S. energy policy could increase the demand for platinum and the other platinum group metals over the coming years.
Platinum is a rare metal that is historically inexpensive compared to gold
Platinum group metals include platinum, palladium, rhodium, osmium, and iridium. While platinum and palladium trade on the CME’s NYMEX division, rhodium, osmium, and iridium only trade in the physical market as they are far less liquid metals. The NYMEX division traditionally trades energy, listing crude oil, oil products, and natural gas futures. Platinum and palladium trade in the energy-centric division because of their industrial applications in oil refining and automobile catalysts.
Platinum is the leading platinum group metal. While it has many industrial applications, it has a history as an investment metal, like gold and silver. From 1996 through 2011, platinum traded at higher prices than gold, earning it the moniker “rich person’s gold.” However, since 2015, platinum’s price has declined steadily versus gold and is now over $1,700 below the yellow precious metal.
Gold’s ascent while platinum has traded in a narrow range could mean platinum offers significant value at the current price level.
Levels to watch in the platinum futures market
The year-to-date chart of NYMEX platinum futures for January 2025 delivery shows that platinum futures have been in the buy zone below $1,000 and the sell zone above.
The daily chart shows that technical support for the January contract is at the September 4, 2024, $912.40 low, and the March 1, 2024, $899.30 bottom. Technical resistance is at the October 30, 2024, $1,064.60 high, and the May 20, 2024, $1,125.30 peak. On the longer-term chart, technical support and resistance are around the $800 and $1,200 levels, respectively, as platinum continues to trade in a tight range at less than half the per-ounce price of gold.
PPLT and PLTM are the platinum ETF products
Gold’s most recent record high was at just above the $2,800 per ounce level. Goldman Sachs’ analysts believe that gold is heading for $3,000 in 2025. Meanwhile, the 1980 high in gold futures was at the $875 per ounce level. Adjusted for inflation, that high is worth over $3,350 per ounce in late 2024, which could be an upside target for the leading precious metal.
Platinum offers significant value as gold continues to make higher lows and higher highs in a bullish trend that began in 1999. Platinum reached its all-time peak of $2,308.80 in 2008.
The most direct investment route for platinum is the physical market for bars and coins. However, physical platinum is rare and can command a significant premium. The NYMEX futures have a physical delivery mechanism for the 50-ounce contract, but taking physical delivery involves costs. The two most popular physical platinum ETF products that do an excellent job tracking the metal’s price are:
- The Aberdeen Physical Platinum ETF (PPLT). At $85.72 per share, PPLT had nearly $1.037 billion in assets under management. PPLT trades an average of over 143,000 shares daily and charges a 0.60% management fee.
- The GraniteShares Platinum Shares ETF (PLTM) is another platinum ETF that owns physical platinum bullion. At $9.04 per share, PLTM had over $48.5 million in assets under management. PLTM trades an average of over 97,000 shares daily and charges a slightly lower 0.50% management fee.
Platinum’s price could offer compelling value as it consolidates around the $1,000 per ounce level. At an over $1,650 discount to gold, platinum is a rarer metal with many industrial applications. Time will tell if platinum can break out above the $1,200 technical resistance level in 2025. A move above that level could lead to an explosive rally, causing platinum to catch up with gold, its precious cousin.
